Alexia properties is issuing a bond at a current price of $949.9516, a maturity value of $ 900 and matures in 3 years. If interest is paid annually and yield to maturity is 4%, calculate the annual coupon rate of the bond? Note that it is being sold at a premium.

Alexia properties is issuing a bond at a current price of $949.9516, a maturity value of $ 900 and matures in 3 years. If interest is paid annually and yield to maturity is 4%, calculate the annual coupon rate of the bond? Note that it is being sold at a premium.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Alexia properties is issuing a bond at a current price of $ 949.9516, a maturity value of $ 900 and
matures in 3 years. If interest is paid annually and yield to maturity is 4%, calculate the annual
coupon rate of the bond? Note that it is being sold at a premium.

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